Everything you need to know about South Africa’s Temporary Employee/Employer Relief Scheme (TERS)
The coronavirus crisis that has triggered a national quarantine is affecting many South African businesses and their ability to continue paying employees. In response to this, the Department of Labour has issued some support packages to bring relief to affected businesses and keep them afloat until the end of the lockdown.
What is the Temporary Employee/Employer Relief Scheme (TERS)?
The Department of Labour recently revealed the COVID-19 Temporary Employee/Employer Relief Scheme (TERS) as a way to provide financial relief to employers and employees.
Businesses who have had to place employees on temporary unpaid leave or are having difficulty paying employees during the lockdown can claim the TERS benefit to help “top up” their salaries, as long as those employees do not receive more than 100% of their usual salaries.
The TERS payments, funded by the Unemployment Insurance Fund (UIF), will be based on a sliding scale percentage of an employee’s salary – between 38% (highest income earners) and 60% (lowest income earners) – capped at R17,712 a month. The principle behind this sliding scale is that the higher the employee’s salary, the lower the TERS benefit rate.
Based on an example provided by the Department of Labour:
where the employee’s salary is R20,000, the calculation will be based as if the worker received R17,712 (the TERS benefit ceiling). This means that the benefit rate will be 38%, which calculates the benefit to be R221.28 per day or R6,638.40 for 30 days.
Once approved, the TERS payments can be active for up to three months per employee.
What businesses are eligible?
Businesses operating in South Africa that have fully or partially closed its operations for no more than three months as direct result of the COVID-19 crisis and subsequent lockdowns are encouraged to apply. Informal convenience shops (or ‘spaza shops’) and hair salons do not qualify and should instead approach the Department of Small Business Development for support.
To claim the TERS benefit for affected employees, those employees must have been working as at 27 March 2020 and has suffered a loss of income as a result of the business closure.
Only businesses who had registered with the UIF before 15 March 2020 qualify to apply for the TERS benefits.
How can I apply?
Eligible businesses can only apply for the TERS payments during the lockdown period, which has now been extended to 30 April 2020.
You will need to appoint someone to be a representative for your business. Before you apply, make sure you have the following documents:
- An official company letter giving authority to the individual to apply on behalf of the company
- A signed acceptance of the standard terms, or Memorandum of Agreement (MOA)
- A template provided by the UIF which includes official business details, business closure dates, the list of eligible employees including their commencement dates, ID numbers, and usual salary
- Proof of salaries paid to the eligible employees for the previous three months
- Completed forms UI19, UI2.7, UI2.1 and UI2.8.
Email your application to Covid19ters@labour.gov.za, or contact the UIF hotline at 012 337 1997 for more information. Additional support and information can be found on the Department of Labour’s website.
By 16 April, around 39,000 applications had already been submitted. However, the UIF reported extremely high error rates, including duplicates, incorrect application formats, and false information, leaving only 136 valid applications to be processed.
Make sure you follow the steps carefully and provide the correct information to avoid having your application rejected.